If every advisor takes for granted that a term life policy can pay benefits via periodic payments, the same can\u2019t be said of beneficiaries.<\/p>\n
In fact, many beneficiaries associate the payout as a lump sum, a phrase sometimes referred to as the \u201clump sum lottery.\u201d<\/p>\n
Hence the need to re-position term life, which is precisely what Allstate has done with Monthly Income Term. It is just one of a few creative new insurance products hitting the market recently.<\/p>\n
\u201cMany families live paycheck to paycheck, so this is relatable to them,\u201d said Brian Stricker, senior vice president of life and retirement products at Allstate.<\/p>\n
Allstate sells through its extensive network of career agents.<\/p>\n
A policy that pays $5,000 a month in income for many years is more intuitive than $1 million upon death of the policyholder, he said.<\/p>\n
Lottery winners can relate to a lump sum, but for most families a windfall doesn\u2019t frame the benefit in terms of how much monthly income the policy will provide.<\/p>\n
Monthly Income Term offers a lump-sum option, but that\u2019s not what people are really looking for, Stricker said.<\/p>\n
\u201cWe wanted to get away from the lump sum,\u201d he said. The income story was \u201cso compelling,\u201d that it \u201cdrove everything on this product,\u201d he said.<\/p>\n
The first-month payout can be increased by between $10,000 and $25,000 to help families with \u201cimmediate needs,\u201d such as funeral costs. Any initial payment that exceeds $10,000 comes at an extra cost, Stricker said.<\/p>\n
Monthly Income Term comes with a conversion feature to switch to permanent life, just like any other term plan.<\/p>\n
The monthly product can be bought for 10- or 20-year terms and structured to deliver payments over a period of three, five or 10 years, the company said.<\/p>\n
Monthly Income Term joins Allstate\u2019s underwritten TrueFit term and simplified issue Basic Term, the company said.<\/p>\n
Allstate had $874.5 million of U.S. life insurance sales last year, up 9 percent from the year before, according to data from the National Association of Insurance Commissioners.<\/p>\n
Term life premiums rose 1 percent in the second quarter compared to the year-ago period and the number of term policies were flat, industry tracker LIMRA reported.<\/p>\n
Colorado Bankers Life has launched its first fee-based multiyear guaranteed annuity (MYGA), a market segment that has seen big sales increases recently with the rise in interest rates.<\/p>\n
CB Life\u2019s CBLA-4 is a four-year fixed annuity offering an interest rate of 4 percent, the company said in a news release.<\/p>\n
The fee-based product, developed in conjunction with DPL Financial Partners, is a designed to be sold through registered investment advisors (RIA). DPL is an insurance network that markets commission-free insurance products to RIAs.<\/p>\n
\u201cThe fee-only market is growing and DPL offers a great platform to reach RIAs and their clients with our competitive four-year, tax-deferred product,\u201d said Chad Burns, CB Life\u2019s senior vice president of national accounts, in a news release.<\/p>\n
MYGAs compete with bank products like certificates of deposit and when interest rates rise, as they are doing now, fixed annuity product sales often improve.<\/p>\n
CBLA-4 joins the company\u2019s CBLA 3, 5 and 7 MYGAs, which guarantee interest rates for 3, 5 and 7 years, respectively. CBLA 3, 5 and 7, which are commission-based, carry withdrawal charges, according to CB Life.<\/p>\n
MYGA sales jumped in the second quarter in the wake of two Federal Reserve rate increases in the first half of the year. The Fed raised rates again last month.<\/p>\n
Second-quarter MYGA sales rose 27 percent to $10 billion over the year-ago quarter and 23 percent over the first quarter, according to market tracker Wink\u2019s Sales & Market Report.<\/p>\n
Fixed annuities have traditionally been sold via commission, but more fee-based fixed annuities are coming onto the market specifically to appeal to RIAs, one of the fastest-growing advisor segments.<\/p>\n
RIAs have traditionally been skittish of selling commission-based products because of the perceived fiduciary risk.<\/p>\n
Last week, Nationwide Advisory Solutions began selling a new single-premium immediate annuity, or SPIA, also designed to be sold by the company\u2019s 5,500 RIAs and fee-based advisors.<\/p>\n
Because there are no commissions built into the design of a fee-based annuity, the money that would otherwise go to the agent remains in the product.<\/p>\n
Depending on fee structures, however, commission-based products are the better deal, according to insurance companies.<\/p>\n
Whether earning a commission or a fee, advisors have more choices than ever even if fee-based annuity sales still represent a mere sliver of overall annuity sales, which last year hit $204 billion.<\/p>\n
Overall annuity sales in the first half were $111 billion, up 5 percent from the year-ago period, LIMRA Secure Retirement Institute reported.<\/p>\n
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at cyril.tuohy@innfeedback.com.<\/em><\/span><\/p>\n \u00a9 Entire contents copyright 2018 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.<\/strong><\/span><\/p>\n The post New Product Roundup: Allstate Leads With Income<\/a> appeared first on InsuranceNewsNet<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" A few creative new life insurance and annuity products hit the market recently, led by Allstate’s Monthly Income Term.<\/p>\n The post New Product Roundup: Allstate Leads With Income<\/a> appeared first on InsuranceNewsNet<\/a>.<\/p>\n","protected":false},"author":578,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/12563"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/578"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=12563"}],"version-history":[{"count":1,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/12563\/revisions"}],"predecessor-version":[{"id":12565,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/12563\/revisions\/12565"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=12563"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=12563"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=12563"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}